Mugabe wants mining indigenisation without compensation – by Tawanda Karombo (South Africa Business Day – July 29, 2013)

http://www.bdlive.co.za/

HARARE — Indications that Zimbabwe’s contentious indigenisation policy will be changed to rule out compensation for expropriated stakes in mining companies have been buttressed by President Robert Mugabe during a campaign rally in the capital ahead of the country’s elections on Wednesday.

The empowerment policy, first promulgated in 2007 and forcibly implemented in the past two years, seeks to transfer majority control in foreign mining groups to black Zimbabwean groups.

However, where foreign mining companies would have received compensation for the 51% shares ceded to black Zimbabwean groups, they will now receive no monetary compensation, Mr Mugabe has said.

Impala Platinum, Anglo American Platinum and Aquarius Platinum are the major mining houses in the industry in Zimbabwe, which is home to the world’s second-largest platinum reserves. The country also has vast deposits of other minerals such as gold, nickel, diamonds and coal, which are being exploited by foreign companies that include New Dawn Mining, Mzi Khumalo’s Metallon Gold and Caledonia Mining Corporation.

“Investors must recognise that they are not owners of the resources but owners of capital. Our share (the minerals) is more sacred, much more meaningful and significant than their capital,” Mr Mugabe told Zanu (PF) supporters gathered at the National Sports Stadium on Sunday for his last official campaign rally ahead of Wednesday’s poll.

The president, who accused international investors of exploiting Africa’s mineral riches without benefiting communities, said the mining groups could not be given control of the mines and the minerals “just because they have brought in the machinery and equipment” to dig up the minerals.

“We must rewrite the economic books that our children learn,” he said. “They were written to serve imperialism and colonialism.”

Empowerment Minister Saviour Kasukuwere was earlier this year forced to deny reports that Zanu (PF) was keen to revise the indigenisation laws for mining companies to rule out monetary compensation for ceded shares.

He had been chided by Mr Mugabe during an interview the longtime leader gave to state-owned television, in which he criticised Mr Kasukuwere for agreeing to pay compensation for shares ceded by mining companies.

The Zimplats, Mimosa and Unki mines — owned by Impala, Aquarius and Angloplat, respectively — have all signed indigenisation deals but these could be thrown aside.

Mr Mugabe has shown clearly that he does not want to pay compensation for the shares ceded as stipulated in the statutes of the indigenisation deals signed by the foreign mining groups.

Despite run-ins with the government over the empowerment policy, the South African mining groups have shown commitment to their Zimbabwean operations. Analysts have said they have few options as Zimbabwe has lower production costs than other destinations.

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